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HomeMy WebLinkAbout2A Redevelopment Commission Minutes 2.27.25 - Signed CITY OF SOUTH BEND REDEVELOPMENT COMMISSION SOUTH BEND REDEVELOPMENT COMMISSION MINUTES February 27, 2025, 2025, at 9:30 a.m. BPW Conference Room, 13th Floor, County-City Building https://tinyurl.com/RDC-2025-4T The South Bend Redevelopment Commission was called to order at 9:33 a.m. President Troy Warner presiding. 1. ROLL CALL Members Present: Troy Warner, President David Relos, Vice President Eli Wax, Secretary Gillian Shaw, Commissioner Ophelia Gooden-Rodgers, Commissioner Marcus Ellison, Member At-Large Legal Staff: Sandra Kennedy, Corporation Council - Virtual Danielle Campbell Weiss, Senior Asst. City Attorney Redevelopment Staff: Sarah Schaefer, Deputy Director, DCI Erik Glavich, Director of Growth and Opportunity, DCI Joseph Molnar, Asst. Dir. of Growth and Opp., DCI Laura Hensley, Board Secretary, DCI Others Present: Zach Hurst, Senior Engineer Canneth Lee, Councilman Tina Patton, 707 Sherman Ave. Matt Barrett, 110 S. Niles Ave. Matthew Neal, Deputy City Clerk Chandler Sturgis, J.C. Hart Company, Inc.- Virtual Tom Everett, Barnes & Thornburg LLP CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – February 27, 2025 2 2. Appointment of Commissioners A. Ophelia Gooden-Rodgers – Council Appointee B. Eli Wax – Mayoral Appointee C. Marcus Ellison – South Bend School Board Member At-Large Matthew Neal, Deputy City Clerk, completed the swearing in of three (3) Commissioners. President Warner welcomed and introduced the new members and explained that Secretary Wax will be shifting into the Mayoral appointed position. 3. Approval of Minutes A. Approval of Minutes of the Regular Meeting of Thursday, February 13, 2025 Upon a motion by Eli Wax for approval, second by David Relos, the motion carried unanimously with Ophelia and Marcus abstaining from the vote; the Commission approved the minutes of the regular meeting of February 13, 2025. 4. Approval of Claims A. Claims Allowances February 11, 2025 Upon a motion by David Relos for approval, second by Eli Wax, the motion carried unanimously; the Commission approved the claims allowances of February 11, 2025. B. Claims Allowances February 18, 2025 Commissioner Gillian Shaw asked about the status of the Byer’s Softball Complex renovations and Joseph Molnar stated that we will give an update at the next meeting. Upon a motion by David Relos for approval, second by Eli Wax, the motion carried unanimously; the Commission approved the claims allowances of February 18, 2025. 5. Old Business A. None 6. New Business A. River West Development Area CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – February 27, 2025 3 1. Public Hearing Regarding Further Amendment of River West Development Area for the Purpose of Establishing a New Allocation Area (Riverwalk Allocation Area) Erik Glavich, Director of Growth and Opportunity, presented items 6A1- 3. Mr. Glavich explained that this is nearly the last stage of establishing the new allocation area for the Riverwalk residential development. He reviewed the scope of the project for the new members of the Commission. Mr. Glavich gave a summary of the development agreement, which is a project-based tax-exempt financing development agreement with developers J.C. Hart Company Inc. Mr. Glavich explained the agreement is for transformative residential housing for two (2) multi-family residential buildings (291 total apartments) and a 398-space parking garage. A minimum $61.5 million in private investment is required per the agreement with City funding some infrastructure improvements (i.e.new street; utilities) through the $5.64 million READI 2.0 award on the west bank of the St. Joseph River. He stated that the Crowe headquarters would remain, however, the southern building would be demolished. Mr. Glavich explained that, what is being asked today is to confirm the process for establishing a new allocation area that will allow incremental tax revenue to be directed in support of the project. He also presented renderings of the project area. Mr. Glavich stated that it’s going to be an urban, walkable area, restoring the street network, providing amenities to not just the residents who will be living there but all of the connecting areas as well. Mr. Glavich stated that private investment commitment is $61.5 million minimum, a developer-purchase bond issuance that generates an estimated $14.845 million in gross proceeds, with $11.925 million in net proceeds after funding bond issuance costs and capitalized interest. 90% of incremental revenue pledged to debt service and an estimated total principal and interest of $29.7 million over a 25-year term. An additional 6% incremental revenue up to $1.342 million (then reverts to 90%). Mr. Glavich explained the timeline, starting with the approvals now, leading into J.C. Hart closing on the property, mid-year closing on the bonds and the City addressing the utilities. Third and fourth quarters of the year, developer construction with a 30-month construction timeline completed by the end of 2028. Mr. Glavich stated that the Commission will be considering the first Resolution No. 3629. If this resolution were to be adopted and approved by the Redevelopment Commission, it would confirm the resolution adopted on January 9th that established the new allocation area out of the River West development area. The second Resolution CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – February 27, 2025 4 No. 3630 that the RDC is asked to consider is called the TIF pledge and is aligned with the development agreement. Commissioner Gooden-Rodgers asked about the rendering of the complex and Chandler Sturgis with J. C. Hart Company stated that it is an accurate picture from their architect. President Warner asked about the timeline of the project an Mr. Sturgis stated that it’s contingent upon the City completing the utility work underneath the site and then the real construction can start and would take approximately 30 months. He explained that the parking garage would take 12 months, and the E- shaped building would take approximately 20 months to complete. Mr. Sturgis also wanted to add that the company has been in business since 1976, has won many architectural awards and currently has over 7,000 units in Indiana and Ohio. President Warner also stated that the RDC owns three buildings to the South of this site and hopes in the future to develop that into housing, commercial or restaurants. Secretary Wax asked what happens if there is an excess of 90% of the TIF revenues in the next 20 years. Tom Everett, Barnes & Thornburg LLP explained that the City can use those to redeem the bonds early and then with respect to the 4% that is retained by the Commission, which will then become 10% after that 6% drops that can be used by the Redevelopment Commission for any purposes under the redevelopment statute and would stay in the allocation area. Mr. Everett also clarified that the bonds are anticipated to run the full period of the 25-year allocation area under the development agreement and that will be how the bonds are structured. Secretary Wax also asked if the City has any ideas for future plans in the area and Mr. Glavich stated that the City did not. Secretary Wax also asked if the City has any plans to redevelop the rest of the riverwalk itself and Sarah Schaefer, Deputy Director of Community Investment, stated that we do have some initial designs and plans but have not secured the funding yet, however, some of the potential excess could go to that. Commissioner Shaw reiterated, $5 million from the READI 2.0 grant will finance the utility relocation, $61.5 million is J. C. Harts obligation per the development agreement and the City will use $1.3 million for the wrapped parking garage, and the RDC would not be at risk. Vice President Relos asked what the next steps are, and Mr. Molnar explained that the Resolution would be recorded with the County, filed with the Department of Local Government Finance 2025 (DLGF) and the assessed value would be from this past January 1. In January of 2026, the assessed value will be re-assessed after demolition and the same process will again take place. A notice was published in the South Bend Tribune on February 14, 2025, regarding the public hearing to consider further the Amendment CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – February 27, 2025 5 of River West Development Area for the Purpose of Establishing a New Allocation Area (Riverwalk Allocation Area). A Public Hearing regarding the further Amendment of River West Development Area for the Purpose of Establishing a New Allocation Area (Riverwalk Allocation Area) was opened to the public for comments and considerations. Danielle Campbell Weiss, Senior Asst. City Attorney, noted that there were no written remonstrative’s received. No comments were made from the public. The Public Hearing was closed. 2. Confirming Resolution No. 3629 (Riverwalk Allocation Area) Upon a motion by David Relos for approval, second by Eli Wax, the motion carried unanimously; the Commission approved Resolution No. 3629 as presented on February 27, 2025. 3. Resolution No. 3630 Pledging Tax Increment (J.C. Hart) Upon a motion by Eli Wax for approval, second by Gillian Shaw, the motion carried unanimously; the Commission approved Resolution No. 3630 as presented on February 27, 2025. B. Administrative 1. Resolution No. 3628 (Revised 2025 RDC Meeting Schedule) Danielle Campbell Weiss, Senior Assistant City Attorney, presented the revised 2025 RDC meeting schedule explained that sometimes our meetings run long and interfere with the Board of Public Works public meeting so, our May and October meetings have been moved to the Council Chambers on the 4th floor also noted on the new schedule. Upon a motion by Eli Wax for approval, seconded by David Relos, the motion carried unanimously; the Commission approved Resolution No. 3628 as presented on February 27, 2025. 2. Update on YMCA Demolition Joseph Molnar, Assistant Director of Growth and Opportunity, wanted to get all of the Commissioners up to speed on the former YMCA demolition process. He stated that in April of 2024, the RDC entered into an agreement with the YMCA to donate 7 parcels to the City and the YMCA committed to open a health and fitness center in the Leighton Health Plex reusing and updating the former Beacon Health and Lifestyle Center. Mr. Molnar stated that they have been a great CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – February 27, 2025 6 partner and will be coming to provide an update in person soon. After the RDC took ownership in August of 2024, there were many points of entry, and the building was difficult to secure. In the Fall of 2024, funding was approved for the demolition of the building and Mr. Molnar shared photos of the cleared site and stated that nearby neighbors are happy with the project. He also stated that the project came in slightly under budget and all excess funds will be returned to the River East TIF fund. The next steps will be in the Spring of 2025, the property will be up for sale and go through the disposition process per state law at the assessed value and if no minimum bids are received, City staff will proceed with a request for proposals in the Summer of 2025. Vice President Relos asked if we have received inquiries and Mr. Molnar stated yes. Secretary Wax asked if the RDC is obligated to take the highest bid and Mr. Molnar explained that staff can make recommendations as well as reject all bids. He explained that he is hopeful that this will be a very attractive site for developers since it’s located on the river and there are many draws to this area. Sarah Schaefer, Deputy Director of Community Investment, also wanted to thank Zach Hurst, Senior Engineer, for his leadership and hard work with all of the unique difficulties with this challenging project. Secretary Wax also thanked everyone from the City for the exciting progress in this entire area. 7. Progress Reports A. Tax Abatement Erik Glavich, Director of Growth and Opportunity, stated The Common Council approved 3 declaratory resolutions for tax abatements, two concerned the Inwood’s building at 425 S. Michigan St. that has been vacant for 25 years and needs care. Penny Hill Homes, a female owned company purchased the building. The first was a vacant building which abates existing taxes over the next two years as well as a 10-year real property tax abatement that would abate the new incrementally assessed value of the building. The Council also approved a 7-year abatement for the new headquarters for HRP Construction, which are consolidating their operations to a new campus within the City limits in South Bend on the far West side which has been annexed to expand their services and will hire six (6) new employees. President Warner stated that these three (3) resolutions total $8-10 million in private investment. Mr. Glavich also stated that he will present to the Common Council the ordinance for the issuance of the bonds for the River Walk project on March 10th. B. Common Council CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – February 27, 2025 7 C.Other 8.Next Commission Meeting Thursday, March 13, 2025, 9:30 a.m. BPW Conference Room 13th Floor 9.Adjournment Thursday, February 27, 10:23 a.m. ______________________________ ______________________________ Eli Wax, Secretary Troy Warner, President